This story has been updated with a statement from FSRA.
Industry groups are calling on the province to reject a proposed fee rule associated with the province’s title protection framework, and say there needs to be greater proficiency standards for those who would use the title of “financial advisor.”
The proposed rule would create a fee exemption for the Canadian Investment Regulatory Organization (CIRO) to apply for approval as a credentialing body, as well as apply on behalf of its members for use of the “financial advisor” title.
The proposal recognizes that the Ontario Securities Commission already provides oversight of CIRO’s activities, the Financial Services Regulatory Authority of Ontario (FSRA) said when it announced last month’s consultation on the proposal. That consultation ended last Friday.
In a release on Tuesday, FP Canada, the Financial Planning Association of Canada (FPAC), Business Career College and Kenmar Associates called the proposal “fundamentally flawed.”
They say it exempts CIRO and its reps from “paying their fair share of fees” required to fund the title protection framework — fees all other credentialing bodies and credential holders pay.
“The proposed fee rule represents a complete reversal on FSRA’s approach to administering Ontario’s title protection framework, and will result in holders of financial planner credentials bearing the weight of the costs of the framework,” Jason Pereira, president of the FPAC, said in the release. “This has the potential to jeopardize the financial viability and future of the framework.”
The group also called for a review of the proficiency standards for “financial advisor.” Approving CIRO and its reps for use of the title on the basis of current standards would “have the effect of permanently entrenching” those standards, the group said.
“If CIRO is allowed to enter a professional framework on the back of a sales licence alone, consumers will continue to be exposed,” Ken Kivenko, president of Ontario-based Kenmar Associates, said in the release. “The reduction in cost recovery resulting from accrediting CIRO (for the financial advisor title) will increase the cost of financial planning services, and access to trusted personalized financial planning for Canadians may be reduced.”
“We urge FSRA to join the Financial and Consumer Affairs Authority in Saskatchewan in exploring approaches to financial advisor competency requirements that best serve the interests of the consumer,” Jason Watt, vice-president of Business Career College in Edmonton and a member of FSRA’s stakeholder advisory committee for financial planners and financial advisors, said in the release.
Saskatchewan is in the process of creating rules for its title protection framework, which includes education requirements for financial advisors related to financial planning.
In comparison, Ontario’s title protection framework has been a source of concern among investor advocates for its product focus.
In a statement, FSRA spokesperson Russ Courtney said the regulator “ensured no duplication in regulatory oversight, and this is reflected in the proposed fee rule. The minimum standard required for use of the financial advisor title provides consumers with greater confidence that the individual they are working with has sufficient technical knowledge, professional skills and competencies to provide financial advice that best suits their needs.”